Traffic Optimization and Multi-sided Pricing in Congested Networks

The paper we consider traffic optimization problem for a model with multi-sided dynamic pricing in the telecommunications market with incomplete competition and taking into account congested networks. The model consists in the use of mathematical modeling methods, game theory and queueing theory. It is assumed that telecommunication companies agree on the rules of incoming and outgoing traffic charging in pairs, and this charging is built as a function of the tariffs that companies offer their subscribers for service. Companies are limited the agreement on mutual rules of reciprocal proportional charging for access traffic at first, which subsequently determine the tariffs for the network users. The reciprocity of the rules means that companies are subject to the same rules for the entire time interval during which the agreement is in force. Taking into account imperfect competition in the telecommunications market and using traffic and profit optimization method for each company the equilibrium tariffs and the volume of services are found with subject to congestion in multi-service networks. Numerical calculation is performed to illustrate the results. © 2018, Springer Nature Switzerland AG.